Communications Companies Remain Uncertain About Net Effect of Trump Tariffs

The U.K. will still see a 10% tariff on most imports. Meanwhile, a flat 145% customs fee on imports from China continues, which could mean significant increases in the cost of wireless devices. Tariffs against dozens of other countries were paused until at least July. Federal Reserve Chair Jerome Powell said Wednesday that tariffs have led to a “very, very uncertain” economic environment.

“China very much wants to make a deal,” Trump said Thursday as he announced the agreement with U.K. Prime Minister Keir Starmer, much of which will require further negotiation. “We’ll see how that works out. Every country throughout the last 40, 50 years has literally ripped off the United States … and we are now making fair deals.”

The effect of tariffs will likely vary by sector, industry officials told us. CEOs of the three major carriers warned in Q1 calls that tariffs will likely have some influence on their businesses. It’s “very early to say where the tariff is going to go and what's going to happen,” Verizon CEO Hans Vestberg said last month. If tariffs end up as high as some predict, Verizon won’t be able to offset the costs of more expensive devices, he said (see 2504220033).

Carri Bennet, counsel to the Rural Wireless Association, said its members are still working through pricing changes that are tied to tariffs. Costs are “expected to increase and will either be absorbed or passed on to the consumer,” Bennet said Thursday. The costs will “most likely be absorbed in the very short term but then passed on to consumers.”

“We’re expecting overall equipment pricing to increase, alongside added supply chain uncertainties tied to current and potential trade policy changes,” Jaimie Lenderman, an Omdia research manager, said during a recent Fiber Broadband Association webinar. “Some won’t adjust pricing until their current inventory is depleted,” she said: “Once they bring in new stock, they’ll pass on the tariff-related increases.”

A fiber industry executive said the effect will likely vary from company to company.

Given Corning’s U.S. manufacturing footprint, including its North Carolina fiber-optics plant, it’s seeing some signs of stronger demand for its U.S.-made products, CEO Wendell Weeks told analysts in an earnings call last month. He said the direct effect of tariffs on Corning “is minimal.” About 90% of its U.S. revenue comes from products of U.S. origin, he said, while 80% of its sales in China are from products made in China or processed in tax- and duty-free zones. He said about 5% of its Chinese sales are imported from the U.S. and subject to Chinese tariffs. Overall, tariffs should affect the company by $10 million-$15 million in Q2, he added.

Tower company executives said in recent financial calls they don’t expect rising prices to hurt their deployments, at least in the short term. Uncertainty about prices won’t “affect demand in the U.S. this year,” American Tower CEO Steve Vondran said last week during a financial call. “Even some of the uncertainties driven by things like tariffs, that's probably more of a future-looking risk than a 2025 risk.”

“We have not experienced, nor do we foresee, any direct impacts from the current tariff policies,” said SBA CEO Brendan Cavanagh, also on an analysts' call. “Our business continues to generate steady cash flow, and the underlying needs of our customers remain robust."

Crown Castle interim CEO Daniel Schlanger said continued growth in data demand “will drive durable growth in our business.” U.S. tariff policies won’t affect the company’s full-year 2025 outlook, he said.

Broadcast TV executives on Q1 earnings calls this week said they're seeing hints of advertising softness from tariffs. “Macroeconomic and tariff-related uncertainty is creating hesitation” among some advertisers, said Sinclair COO Robert Weisbord. Tegna CFO Julie Heskett echoed that idea: "Advertising demand remains closely tied to overall economic sentiment, and with consumer confidence softening, some advertisers are taking a more cautious, wait-to-see approach."

“So many of our clients are pulling back because they really don't know what the cost of their products are right now,” said Gray Media co-CEO Hilton Howell. Nexstar CEO Perry Sook downplayed the effect of tariffs on his company and said advertising categories affected by them represent 15% of Nexstar’s total revenue. Howell said he hopes the trade deal with the U.K. represents a return to stability.

“Any exemptions to the tariffs, such as those given to iPhones and related imports from China, are not strategic responses, but rather political ones,” Information Technology and Innovation Foundation President Robert Atkinson said Thursday in a blog post. “The White House knew consumers would hate paying double the price for their iPhones.”

The administration must recognize that there’s “a difference between potato chips and computer chips,” Atkinson said: “If a firm in an industry driven by advanced technology produces in America and sells a lot globally, but relies on imports for a significant part of its supply chain, it will likely lose global market share as tariffs drive up its production cost.”